In terms of the reaction to today’s payroll figure, the bulls have a free pass as a bad report would be attributed to weather and a better one would show improvement in the labor market. From a pure analytical view, there will be much noise in the data as the survey period captures the snow storms in Feb. It is thus best to look at ADP which captures actual payroll slips to a large extent and the weather only had a “very small effect” on the number and average over the month the weekly jobless claims data. Add to this the employment components of the ISM manufacturing and ISM services data and the conclusion is a continued improvement in the labor picture in terms of firing but only a selective bounce in hiring. There were no surprises in the Chinese state of the country speech by Premier Wen. On one hand Chinese banks are slowing lending but an official said they will still reach 7.5t in ’10, down from 9.6t in ’09 but well above 4.9t in ’08. Germany reported a strong Jan manufacturing figure and there is talk that Japan will step up QE.
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